roadshow presentation q2 2012 results presentation q2 2012 results 1 cautionary statement “this...

Roadshow PresentationQ2 2012 Results

1

Cautionary Statement

“This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Forward-looking information involves risks and uncertainties that could significantly affect expected results.”

2Results for the Second Quarter 2012

Leading Operator in 8 Markets in Central and Eastern Europe

3

SerbiaCroatia

Austria

Bulgaria

Belarus

Kosovo

Liechtenstein

Macedonia

Slovenia

> Mobile market share: 39.3%> Access lines: almost 2.3 mn

> Mobile market share: 47.7%> Access lines: 138,000

> Mobile market share: 26.0%




> Mobile market share: 38.6%> Access lines: 154,700


Results for the Second Quarter 2012

% of shares outstandingAs of 31 December 2011

Shareholder Structure Based on 2 Stable Core Shareholders As Well As Value and Yield Investors

4

Per 30 June 2012% of shares outstanding

Value & Yield 29.2%

ÖIAG 28.4%

RPR Privatstiftung

15.1%

Other 9.0%

Retail 5.9%

Index 6.3%

Not identified

4.2% Trading 1.9%

Value & Yield 23.5%

ÖIAG 28.4%RPR Privatstiftung

16.0%

America Movil 6.8%

Other* 10.2%

Retail 5.2%

Index 6.6%

Not identified

3.1% Trading 0.2%

* Including Inmobiliaria Carso

> 15 June 2012: América Móvil holds, directly and indirectly via its 100% sub-subsidiary AMOV, 6.75% of total outstanding shares of Telekom Austria Group

> AMOV has signed an agreement with RPR Privatstiftung that is subject to conditions precedents for thepurchase of up to 16.01% of total shares outstanding of Telekom Austria Group

> Inmobiliaria Carso, majority owned by Slim family, holds directly and indirectly 3.14% of total sharesoutstanding (included in free float)


5

Relative Share Price Performance of Telekom Austria Group – 2012 Year-to-Date

50

70

90

110

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

TKA ATX DJ Telco Stoxx


Agenda

> Operational and Financial Highlights for the Second Quarter 2012

> Key Financial Developments in theSecond Quarter 2012

> Key Challenges and Countermeasures

> Outlook for Full Year 2012

> Appendix


Operational and Financial Highlights for the Second Quarter 2012


Disruptive Competition Drives Decline in Results


> Second quarter 2012 results markedly impacted by heavy competition in major markets and macro-economic headwinds in CEE

> Stable Group EBITDA comparable margin reflects effective countermeasures taken in all segments

> Group Revenues decline by 4.2% to EUR 1,063.2 mn mostly due to lower revenues in the Austrian Segment

> Intensified focus on cost control limits Group EBITDA comparable decline to 4.2%

> New Ambition Program: rebalancing of initiatives protects target amount of approximately EUR 40 mn opFCF* target for 2012

> Revised Group guidance 2012:

> Revenues: approximately EUR 4.2 bn,

> EBITDA comparable: EUR 1.40 bn to EUR 1.45 bn,

> CAPEX**: EUR 0.70 bn to EUR 0.75 bn,

> Operating Free Cash Flow*: EUR 0.70 bn - EUR 0.75 bn

> Dividend per share of EUR 0.38 for 2012**** Operating Free Cash Flow = EBITDA comparable – CAPEX (excluding investments for licenses and spectrum and acquisitions)

** Does not include investments for licenses and spectrum and acquisitions

*** Intension of proposal at AGM 2013

> Disruptive competition drives ARPU decline in major markets

> Regulation impedes fixed line price increases in Austria

> 59.4% MTR cuts in Bulgaria in the second half of 2012

> Usage impacted by continued macro-economic headwinds in CEE, particularly in Bulgaria

> Foreign exchange uncertainty remains in Belarus and Republic of Serbia

Key Operational Drivers


> Revenue growth in three segments mitigates declines in Austria and Bulgaria

> Successful convergence strategy balances mobile pressure in Austria, Bulgaria and Croatia

> Strong operational performance offsets foreign exchange effects in Belarus

> EUR 39.5 mn OPEX savings protect EBITDA comparable margin

> Ample CAPEX flexibility to protect operating free cash flow target

Key Financial Developments in theSecond Quarter 2012


(in EUR million) Q2 2012 Q2 2011 % change

Revenues 1,063.2 1,109.3 -4.2%

EBITDA comparable* 364.8 380.8 -4.2%EBITDA comparable margin* 34.3% 34.3%

Restructuring -6.6 -34.6 -80.8%

Impairment and reversal of impairment 0.0 0.0 n.a.

EBITDA (incl. Effects from Restructuring and Impairment tests) 358.2 346.3 3.4%

EBITDA (incl. Effects from Restructuring

and Impairment tests) margin 33.7% 31.2%

Depreciation & amortization -259.0 -261.3 -0.9%

Operating income 99.1 85.0 16.6%

Financial result -55.1 -53.6 2.9%

Income before income taxes 44.0 31.4 40.2%

Income tax expense -9.9 -11.4 -12.9%

Net income / Net loss 34.0 20.0 70.5%

Continued Focus on Cost Control Protects EBITDA Comparable Margin

> Revenue increase in Croatia, Belarus and Additional Markets limits impact of revenue decline in Austria and Bulgaria

> Fixed line acquisitions in Bulgaria and Croatia contribute positively

> EUR 39.5 mn OPEX savings protect EBITDA comparable margin

> 18 FTE addressed result in restructuring charge of EUR 6.6 mnin Austria

> Net income rises to EUR 34.0 mn


* Excluding effects from restructuring and impairment tests

1,109.3

1,063.2

-57.5

-3.3 1.3 3.8 2.4 2.8 1.4 3.0

Rev

enue

s Q

2 20

11

Aust

ria

Bulg

aria

Cro

atia

Bela

rus

Slov

enia

Rep

ublic

of

Serb

ia

Repu

blic

of

Mac

edon

ia

Cor

pora

te, O

ther

s &

Elim

inat

ions

Rev

enue

s Q

2 20

12

Additional Markets:> 6.1% ARPU growth in Slovenia> Strong subscriber growth in Republic of Serbia and

Republic of Macedonia

-7.9% yoyQ2 2012: EUR 673.6 mnAustria

Growth in Three Segments Dampens Revenue Decline in Austria and Bulgaria

> Price decline and increased churn driven by intensified competition

> 8.2% of revenue decline attributable to regulatory effects> EUR 11.5 mn decrease due to sale of Mass Response Service

GmbH in Q3 2011

Croatia:> EUR 12.3 mn fixed line service revenues mitigate effects

from heavy mobile competition> 9.5% increase in mobile broadband subscriber base

Belarus:> 5.2% growth despite net negative impact of hyperinflation

accounting and foreign exchange translation> Price increases, optimization of tariff and handset portfolio and

higher usage result in revenue growth of 71.5% on a clean basis*> 108.9% rise in mobile broadband subscriber base

- 4.2%

Bulgaria:> 9.4% ARPU decline driven by fierce competition> EUR 5.0 mn fixed line contribution

12

+5.2% yoyQ2 2012: EUR 76.7 mn

+6.6% yoyQ2 2012: EUR 104.4 mn

+1.3% yoyQ2 2012: EUR 101.8 mn-2.5% yoyQ2 2012: EUR 127.2 mn ||

| |

|


* Excluding effects from hyperinflation accounting and foreign exchange translations

380.8 364.8-20.4 -9.9 6.3 -1.5 1.22.4 3.9 2.1

EBIT

DA

com

p.Q

2 20

11

Aust

ria

Bul

gari

a

Cro

atia

Bela

rus

Slov

enia

Rep

ublic

of

Serb

ia

Rep

ublic

of

Mac

edon

ia

Cor

pora

te,

Oth

ers

&

Elim

inat

ions

EBIT

DA

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p.Q

2 20

12

Croatia:> EUR 4.7 mn lower OPEX result in EBITDA comparable

margin rising to 32.8% from 27.0%> Higher OPEX in Q2 2011 driven by severance

expenses

EUR 39.5 mn Group OPEX Savings Protect Profitability

> EUR 38.0 mn OPEX savings> Lower marketing expenses> Reduction in handset subsidies

> Stable Personnel expenses

> OPEX savings driven by lower Personnel expenses due to headcount reduction and lower marketing and sales expenses

> EUR 8.7 mn decline in Other Operating Income mainly due to warranty issues in Q2 2011

Belarus:> EUR 21.8 mn net negative impact of

hyperinflation accounting and foreign exchange translation

> In local currency OPEX increased driven by higher Material and Interconnection expenses as well as Maintenance and repair expenses

13

-8.6% yoyQ2 2012: EUR 218.2 mnAustria-14.0% yoyQ2 2012: EUR 60.9 mnBulgaria

-4.6% yoyQ2 2012: EUR 31.8 mn

+23.2% yoyQ2 2012: EUR 33.4 mn |

||

|

- 4.2%


Additional Markets:> Continued strong EBITDA comparable growth

driven by higher revenues and lower expenses

+36.2% yoyQ2 2012: EUR 28.2 mn|

100

110

120

130

Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 129,000

11,000

13,000

Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12

Belarus Republic of Serbia

Stable BYR Development Whilst Serbian Dinar Loses 10.9% Year-to-Date


EUR-BYR Development

Accumulated Inflation Development in Belarus

> Approx. 30% expected by the end of 2012*

> Q2 2012: EUR 5.1 mn effect on revenues and EUR 1.4 mn on EBITDA comparable

EUR-RSD Development

* Source: Moody’s

1-3 M 1-6 M 1-9 M 1-12 M

2011 6,1% 36,2% 74,5% 108,7%

2012 5,00% 10,50%

YTD: +6.6%1-6 M 2012: +4.1% YTD: -10.9%1-6 M 2012: -9.7%

(in EUR million) Q2 2012 Q2 2011 % change 1-6 M 2012 1-6 M 2011 % change

Gross cash flow 304.1 350.6 -13.3% 631.0 686.4 -8.1%

Change in working capital -21.3 -38.0 -43.9% -155.7 -223.3 -30.2%

Ordinary capital expenditures -185.1 -156.7 18.1% -330.9 -277.1 19.4%

Proceeds from sale of equipment 0.8 -0.3 n.a. 2.1 1.0 110.3%

Free cash flow 98.4 155.5 -36.7% 146.5 187.0 -21.7%

Free cash flow per share 0.22 0.35 -36.7% 0.33 0.42 -21.7%

Working Capital Savings Offset Lower Gross Cash Flow and CAPEX Increase

> Lower gross cash flow reflects operational challenges

> Key non-cash adjustment being lower expenses for provisions for restructuring

> Lower cash requirements for working capital mainly due to increase in accounts payable and other liabilities

> Increase in CAPEX remains driven by planned mobile access investments and Giganetrollout in Austria



Key Challenges and Countermeasures

Rebalancing of New Ambition Program Ensures that EUR 40 mn opFCF* Target for 2012 is Met

17

Initial NAP


Rebalanced NAP

Revenues30%

OPEX55%

CAPEX**15%

Revenues20%

OPEX65%

CAPEX**15%

Further OPEX savings to offset pressure on revenue initiatives

CAPEX** stable

- 10pp Revenues

+ 10pp OPEX

* Operating Free Cash Flow = EBITDA comparable – CAPEX (excluding investments for licenses and spectrum and acquisitions)


> Accelerated ARPU decline due to price decline and migration to mobile package tariffs

> Bundle price increases impeded due to competition law

> Fierce competition prohibits mobile price increases

> Compulsory data bill shock prevention

Challenges

Austrian Segment: Convergence and Cost Countermeasures to Meet Aggressive Competition


Key Countermeasures for the Second Half 2012

45% of service revenue decline compensated by additional cost saving measures:

> Marketing and sales expenses

> Technical and overhead costs

Marketing and Sales expenses

Focus on up-/cross selling of convergent bundlesConvergence

Project portfolio screening, adjusted rollout and vendor negotiationsCAPEX**

* Included in NAP


> ARPU pressure

> Price aggression

> Migration to lower tariffs

> Approx. 60% MTR cuts in H2

> Accelerated ARPU decrease from aggressive All-In tariffs

> Fierce price competition in business segment

> Additional roaming price increases in Slovenia

> New installation fee and 60/60 charging in Bulgaria

> Marketing and sales expenses savings in all markets

> Reduction of Personnel expenses in Bulgaria

> Focus on cost reduction with immediate impact (e.g. administration or project related costs)

> Slowdown of RAN modernization

> Reduced 2G rollout in Republic of Serbia due to prolongation of national roaming in peripheral regions

> FX pressure on Serbian results

> Market potential for data products lagging behind

Central and Eastern Europe: Competition and Macro-Economy Remain Key Challenges


Bulgaria

Countermeasures

Croatia Additional Markets

* Included in NAP

Outlook


* Does not include investments for licenses and spectrum and acquisitions

** Operating Free Cash Flow = EBITDA comparable – CAPEX (excluding investments for licenses and spectrum and acquisitions)

*** Intension of proposal at AGM 2013

Telekom Austria Group Outlook for Full Year 2012 Adapted to Second Quarter 2012 Results


Telekom Austria Group – Full Year 2012On a constant currency basis for all markets as well as before any effects of hyperinflation accounting for the Belarusian segment.

As of 16 August 2012

approx. EUR 4.4 bnRevenues

EBITDA comparable

CAPEX*

Operating Free Cash Flow**

Dividend***

As of 10 May 2012

approx. EUR 4.2 bn

approx. EUR 1.5 bn EUR 1.40 bn – EUR 1.45 bn

approx. EUR 0.75 bn EUR 0.70 bn – EUR 0.75 bn

approx. EUR 0.75 bn EUR 0.70 bn - EUR 0.75 bn

DPS of EUR 0.38 for 2012 DPS of EUR 0.38 for 2012

Out

loo

k as

o

f 10

May

20

12

Aus

tria

Bulg

aria

Cro

atia

Bela

rus

Add

itio

nal

Mar

kets

Revi

sed

Out

loo

k as

o

f 16

Aug

ust

2012

approx. EUR 1.5 bn

Intensified Cost Control Mitigates Effects from Revenue Pressure on EBITDA Comparable


Revised EBITDA Comparable Outlook

EUR 1.40 bn –EUR 1.45 bn

Δ: approx. EUR 50 mn

on track

Mainlydriven byRepublicof Serbia

Appendix 1


Revenue Split - Segment Austria (in EUR million) Q2 2012 Q2 2011 % change

Monthly fee and traffic 476.5 511.5 -6.8%

Data and ICT Solutions 50.9 49.5 2.8%

Wholesale (incl. Roaming) 38.0 44.3 -14.3%

Interconnection 81.4 86.7 -6.1%

Equipment 23.2 24.1 -3.6%

Other revenues 3.6 15.0 -76.0%

Total revenues - Segment Austria 673.6 731.1 -7.9%

Revenue Split - International Operations (in EUR million) Q2 2012 Q2 2011 % change

Monthly fee and traffic 302.3 294.3 2.7%

Data and ICT Solutions 0.0 0.1 -73.7%

Wholesale (incl. Roaming) 10.5 13.1 -19.9%

Interconnection 63.5 62.8 1.2%

Equipment 29.0 25.7 12.9%

Other revenues 3.2 3.5 -8.9%

Total revenues - int. Operations 408.6 399.5 2.3%

Telekom Austria Group – Revenue Breakdown


Operating Expense - Segment Austria (in EUR million) Q2 2012 Q2 2011 % change

Material expense 55.0 62.3 -11.6%

Employee costs 167.6 169.2 -0.9%

Interconnection 75.4 81.3 -7.2%

Maintenance and repairs 28.3 29.6 -4.1%

Services received 28.9 40.9 -29.2%

Other support services 36.5 34.3 6.2%

Other 86.3 98.7 -12.6%

Total OPEX - Segment Austria 478.0 516.1 -7.4%

Operating Expense - International Operations (in EUR million) Q2 2012 Q2 2011 % change

Material expense 39.6 37.4 5.8%

Employee costs 33.0 37.9 -13.0%

Interconnection 54.4 53.6 1.4%

Maintenance and repairs 16.2 13.5 19.6%

Services received 27.6 25.1 10.0%

Other support services 4.1 3.5 15.8%

Other 83.9 90.1 -6.9%

Total OPEX - int. Operations 258.7 261.2 -1.0%

Telekom Austria Group – Expense Breakdown


Mobile Subscribers (in 000) Q2 2012 Q2 2011 % change

Austria 5,288 5,176 2.2% Market share 39.3% 40.8%

Bulgaria 5,532 5,295 4.5% Market share 47.7% 49.3%

Croatia 1,977 2,039 -3.0% Market share 38.6% 38.8%

Belarus 4,679 4,461 4.9% Market share 43.0% 40.8%

Slovenia 646 633 2.1% Market share 29.9% 29.9%

Republic of Serbia 1,687 1,506 12.0% Market share 16.5% 14.7%

Republic of Macedonia 601 505 19.0% Market share 26.0% 22.7%

Liechtenstein 6 7 -7.2% Market share 15.9% 20.5%

Telekom Austria Group - Mobile Communication Subscriber Base


FTE (Average period) Q2 2012 Q2 2011 % change

Austria 9,308 9,506 -2.1%

International 7,443 7,439 0.1%

Telekom Austria Group* 16,908 17,106 -1.2%

FTE (End of period) Q2 2012 Q2 2011 % change

Austria 9,300 9,372 -0.8%

International 7,340 7,502 -2.1%

Telekom Austria Group* 16,797 17,032 -1.4%

Telekom Austria Group – Headcount Development

*Including corporate segment


Capital Expenditures (in EUR million) Q2 2012 Q2 2011 % change

Segment Austria 121.2 114.6 5.8%

Segment Bulgaria 16.2 16.7 -3.1%

Segment Croatia 16.8 8.8 91.0%

Segment Belarus 7.4 4.4 68.1%

Segment Additional Markets 23.5 12.3 91.4%

Slovenia 4.1 2.1 93.5%

Republic of Serbia 17.6 8.9 98.1%

Republic of Macedonia 1.7 1.1 59.6%

Liechtenstein 0.1 0.2 -56.1%

Eliminations additional markets 0.0 0.0 n.a.

Corporate, Others & Elimination 0.0 0.0 n.a.

Total capital expenditures 185.1 156.7 18.1%

Thereof tangible 154.0 124.3 23.9%

Thereof intangible 31.2 32.5 -4.0%

Telekom Austria Group – Capital Expenditures Split


Net debt (in EUR million) Jun. 30, 2012 Dez. 31, 2011 % change

Long-term debt 3,668.2 2,960.4 23.9%

Short-term borrowings 718.7 1,052.4 -31.7%

Cash and cash equivalents, short-term and long term investments, finance

lease receivables -1,008.4 -657.7 53.3%

Derivate financial instruments for hedging purposes 39.0 25.2 54.9%

Net Debt of Telekom Austria Group 3,417.4 3,380.3 1.1%

EBITDA comparable (last 12 months) 1,476.0 1,527.3 -3.4%

Net Debt/ EBITDA comparable (last 12 months) 2.3x 2.2x n.a.

Telekom Austria Group – Net Debt


* Includes EUR 1.8 mn related to fixed line acquisitions in Bulgaria, which is reported in Other liabilities

** Includes approx. EUR 30.0 mn related to velcom, which is reported in Other liabilities

665

992

129 253

804

553

205 47 - -

739

2012* 2013** 2014 2015 2016 2017 2018 2019 2020 2021 2022

Telekom Austria Group – Debt Maturity Profile

Debt Maturity Profile(in EUR million)

*

> EUR 4,386.8 mn of short- and long-term borrowings as of 30 June 2012

> Average cost of debt of approximately 4.4%


25%

75%

Floating Fixed

64%

36%

Bonds Loans

Telekom Austria Group – Debt Profile

Overview Debt Instruments Fixed-Floating Mix

> S&P: BBB (stable outlook)

> Moody’s: Baa1 (stable outlook)

Lines of Credit Ratings

> Undrawn committed lines of credit amounting to EUR 935.0 mn*

> Average term to maturity of approximately 4.5 years*


* As of 31 July 2012

(in EUR million)

Excluding Hyperinflation

and FX in BelarusImpairment Reported

Revenues 125.1 0.0 76.7

Other operating income 2.1 0.0 1.2

Operating expenses -73.6 0.0 -46.1

Impairment 0.0 0.0 0.0

Depreciation and amortization -14.0 0.0 -25.7

Financial result 1.9 0.0 2.3

Income taxes -3.9 0.0 -1.0

Net income 37.7 0.0 7.4

0.0

-11.7

0.4

2.9

-30.3

Hyperinflation and FX Effects in

Belarus

-48.4

-0.9

27.4

(in EUR million) Excluding Hyperinflation Impairment* Reported

Goodwill 97.5 -279.0 0

Current and other non-current assets 261.4 0.0 606.6

Current and non-current liabilities -63.5 0.0 -125.7

Stockholders' Equity 295.4 -279.0 480.9464.6

Hyperinflation

181.5

345.2-62.1

Belarus: Impact of Hyperinflation Accounting and FX Translations in Second Quarter 2012

32

Belarus Profit and Loss Statement for the Second Quarter 2012

Belarus Balance Sheet as of 30.06.2012


* Cumulated hyperinflation effects as of first application of IAS 29 in fourth quarter 2011

2,323 2,327 2,336 2,320 2,288

1.2 3.2 9.6

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 1,8001,9002,0002,1002,2002,300

-12.0-7.0-2.03.08.0

44 43 43 42 42

1,172 1,204 1,231 1,241 1,238

276 272 272 271 270

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

16.0

31.1 26.5

9.7

-2.5

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

32.2 31.8 32.5 31.9 31.5

224.5 221.6226.8

222.7

217.2

210.0215.0220.0225.0230.0235.0240.0245.0250.0

20.020.521.021.522.022.523.023.524.024.525.025.526.026.527.027.528.028.529.029.530.030.531.031.532.032.533.033.534.034.535.035.536.036.537.037.538.038.539.039.540.0

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Segment Austria - Fixed Line Key Performance Indicators

ARPL & ARPL Relevant Revenues(in EUR)

Fixed Broadband Access Lines(in 000)

Total Fixed Access Lines & Net Adds(in 000)

Fixed wholesale broadband lines

Unbundled linesFixed retail broadband lines

Fixed Broadband Net Adds incl. Wholesale(in 000)

ARPL ARPL relevant revenues Total fixed access lines Net Adds


-16.4-32.2

150.9%153.5%

156.6%158.2% 159.4%

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

702.3721.4

744.9764.1 768.9

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

149.5

146.4

152.7151.9

149.1

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

20.520.0

19.218.5 18.3317.4

311.9

300.9 293.6290.7

17.017.518.018.519.019.520.020.521.0

285.0

295.0

305.0

315.0

325.0

335.0

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Segment Austria – Mobile Key Performance Indicators

ARPU & ARPU Relevant Revenues(in EUR)

MoU per Subscriber(in min)

Mobile Broadband Customers(in 000)

Mobile Penetration(in %)

ARPU ARPU relevant revenues


11.4% 9.5%

6.7% 5.6%

81.9% 84.9%

Q2 11 Q2 12

Segment Austria – Broadband Market Split

A1 fixed wholesale

A1 fixed retail

Unbundled lines

Mobile Broadband

other operators

Cable

A1 Mobile broadband

Other fixedline

A1 fixed line

Mobile

Market Share Broadband Lines(in %)

Market Share Voice Minutes(in %)


30.4% 29.3%

1.1% 1.0%

18.2% 18.2%

14.9% 14.9%

6.6% 5.8%

28.7% 30.8%

Q2 11 Q2 12

161.6 177.6 192.0242.4

278.8

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

143.2%145.9%

151.4% 151.7%155.4%

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

104.1

98.697.5 96.7

97.8

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

7.37.0 7.0

6.16.6

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Segment Bulgaria – Mobile Key Performance Indicators

ARPU(in EUR)





119.1%

127.0%

119.9%117.4%

119.3%

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

165.1

192.9

170.6 169.5

180.8

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

97.1 96.592.6

95.8

104.3

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

13.4 13.4

12.411.7

12.6

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Segment Croatia – Mobile Key Performance Indicators

ARPU*(in EUR)

MoU per Subscriber*(in min)

Mobile Broadband Customers*(in 000)

Mobile Penetration*(in %)

37

* As of Q4 2011 calculation method of fixed access lines has been harmonized to Group standards and have been restated as of Q3 2011. The reported result includes depreciation and amortization of fair value adjustments resulting from past business combinations and therefore may deviate from the result of the single financial statements.


115.4% 116.0%118.8% 119.4%

115.0%

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

275.4349.6

453.1518.6 575.3

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

186.0 183.4 179.8174.1

189.8

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

4.9

3.5 3.5 3.74.9

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Segment Belarus – Mobile Key Performance Indicators

ARPU(in EUR)





7.6

8.3

7.47.2

7.5

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

7.37.4

7.3

6.9

7.1

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

168.7

155.4

178.3 177.0 179.1

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

20.4

22.7

21.420.7

21.6

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Segment Additional Markets – Mobile Key Performance Indicators

Slovenia - ARPU(in EUR)

Republic of Serbia - ARPU(in EUR)

Slovenia - MoU per Subscriber(in min)

Republic of Macedonia - ARPU(in EUR)


Appendix 2 –Regulatory Topics


Negative Impact of Approx. EUR 175 mn on EBITDA Comparable Expected until 2013*

Interconnection

Roaming

Digital Dividend

License Prolongations

> EU commission: before January 1, 2013

> Relevance for EU countries & Croatia

> 900 MHz and 1800 MHz spectrum

> Upcoming issue for Austria, Slovenia and Bulgaria

Key Points

Not included in CAPEX guidance

Impact EBITDA comp. 2010 - 2013:

EUR -100 mn

Impact EBITDA comp. 2010 - 2013:

EUR -75 mn Impact EBITDA comp.

2010 -2013: EUR -175 mn

*as of December 2010


July 2009

January 2010

July 2010

August 2010

January 2011

June 2011

July 2011

August 2011

January 2012

April 2012

July 2012

August 2012

January2013

Austria 4.00 3.50 3.01 2.51 2.01

Bulgaria 11.76 10.48 6.65 2.70 2.30*

Croatia 9.10 7.60 7.60 5.30 4.00

Slovenia 5.23 4.95 4.66 4.38 4.38 4.09 3.81 3.52 3.24

Macedonia 9.50 9.50 8.80 7.50 6.00

Serbia 5.15 4.824.68 (until next price

cap)not clear when next regulatory decision will take place

market analysis during 2012

Glide Path of Mobile Termination Rates

42

*According to CRC’s glide path proposal which is currently pending the notification to the European Commission (numbers are given for peak hours)


July 2009 July 2010 July 2011Voice

Wholesale 0.26 0.22 0.18

Retail active 0.43 0.39 0.35

Retail passive 0.19 0.15 0.11

SMSWholesale 0.04 0.04 0.04

Retail 0.11 0.11 0.11

DataWholesale 1.00 0.80 0.50

EU-Roaming Glide Path


Appendix 3 –Personnel Restructuring in Austria


617.4 623.0721.9

888.8 875.0 865.8

2008 2009 2010* 2011* Q1 2012* Q2 2012*

2008 2009 2010 2011 Q1 2012 Q2 2012

FTE Effect 632.1 -10.0 76.9 233.7 4.4 6.6

Interest rate

adjustments 0.0 27.5 47.2 0.0 0.0 0.0

Total 632.1 17.5 124.1 233.7 4.4 6.6

Overview – Restructuring Charges and Provision vs. FTEOverview Restructuring Charges(in EUR million)

FTEs Addressed

45

Overview Restructuring Provision(in EUR million)

* Including liabilities for transfer of civil servants to government bodies

Provisioned FTEs


2008 2009 2010 2011 Q1 2012 Q2 2012Transfer to

government 0 0 158 106 9 18

Social plans 256 451 28 685 0 0

Staff released

from work 968 -194 27 0 0 0

Total 1,224 257 213 791 9 18

2008 2009 2010 2011 Q1 2012 Q2 2012

Transfer to

government 0 0 158 264 273 291

Social plans 14 273 299 922 916 908

Staff released

from work 968 789 763 649 644 634

Total 982 1,062 1,220 1,835 1,833 1,833

Total cash flow impact

2008 14.7

2009 62.0

2010 57.9

2011 89.0

Q1 2012 24.3

Q2 2012 21.5

Overview – Cash Flow Impact of Restructuring

Overview Cash Flow Impact(in EUR million)

46

> Total cash flow impact comprises old as well as new programs

> Total expected cash flow impact for 2012 of approximately EUR 100 mn


Restructuring – Explanatory Information

47

> The following factors have to be taken in account when comparing “FTEs Addressed” to “Provisioned FTEs”:

> FTEs of social plans may include receivers of one-time payments such as golden handshakes and can fluctuate due to retirement

> Number of staff released from work may fluctuate due to permanent reactivation, acceptance of social plans, transfer to government or retirement

> In 2009, the following effects were noticeable:

> “FTE Effect” of EUR -10.0 mn as income from a reduction of staff released from work outweighed expense for number of new social plans

> This was overcompensated by interest rate adjustments and resulted in a total restructuring charge of EUR 17.5 mn

> Social plans included a significant number of FTEs accepting one-time payments

> Previously communicated FTE numbers for 2008 and 2009 were adapted to a unified accounting view


roadshow presentation q2 2012 results presentation q2 2012 results 1 cautionary statement “this...

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